Price War in the SSD Market

Large SSD makers have reportedly begun to slash prices on their products. The move is logically linked to the falling price of flash memory, but there may be something else involved.

NAND flash memory prices will constantly go down once smaller lithography technologies start producing it and the production capacity is increased. Increased production usually means lower prices just as long as demand doesn’t greatly surpasses the available production.

Demand is growing, but the yet prohibitive SSD prices are keeping it in check.

The demand for SSDs won’t grow out of control until SSD per-gigabyte prices get to be lower than the per-gigabyte prices of the HDDs from last year. Yes, last year was quite a normal situation where, if you had 1TB of data, you wondered whether it wasn’t better to buy a new HDD instead of writing it on to DVDs.

This year, the prices of the HDDs are so high that people only buy them so that they would be able to put together a computer and install the operating system with some extra capacity to spare.

Nobody checks for capacity/dollar ratio, as it would be normal. SSDs are too small and expensive so, as expensive as hard disk drives are right now, you’d have a little more space using a HDD.

SSDs haven’t yet reached the level of demand there is for system hard drives right now. The HDD demand from 2011 is still a few more years away when SSDs are concerned.

If the demand is kept in check, every manufacturing breakthrough will mean a slight decrease in price in the hope of increased volume of sales.

Large SSD makers such as Kingston Technology, Intel, OCZ and Crucial have all started reducing the prices of their products, but the reduction may not be as strongly linked to the decrease in the NAND flash costs, but to the increased number of small “amateur” SSD makers that are “messing up” their market.

The big SSD players may just be trying to deal some heavy blows to the little guys.